November 13, 2007 - Dublin, Ireland - Norkom has announced a 53% increase in revenue to €17.6 million and a 50% improvement in EBITDA (Earnings before interest, tax, depreciation and amortisation) to €3.1 million for the half year ended 30 September 2007 (2007). This period has included the acquisition of Digital Harbor on 31 July 2007 for €26.7 million (US$36.5 million) (excluding acquisition costs).

The Group has executed on its previously stated M&A strategy whilst continuing to deliver strong organic revenue growth of 45% in 2007. This has resulted in the addition of 19 new clients in 2007, nine of which stem from organic growth combined with ten clients coming from Digital Harbor mainly from the tier one US financial services sector.

Norkom’s strong performance has been attributed to good sales success particularly in North America and also the addition of revenue from our Asia Pacific region in this period.

The company reports the following key financial highlights:

• Revenue up 53% to €17.6 million; (2006: €11.5 million)
• Gross profit margin increased to 66%; (2006: 65%)
• EBITDA up 50% to €3.1 million (18% margin); (2006: €2.1 million, 18% margin)
• Adjusted EPS up 54% to 3.35 cents; (2006: 2.17 cents)
• Net cash balance at 30 September 2007 of €21.7 million; (2006: €26.4 million)
• Successful placing raising €15.5 million to part-fund acquisition of Digital Harbor for €26.7 million (US$36.5 million)
• Net cash inflow from operating activities increased to €3.0 million (2006: €1.7 million)

Key business highlights for the half year included the following:

• Norkom acquired Digital Harbor in July 2007 whilst also delivering on its strategy of organic growth with profits.
• Following a review of Digital Harbor’s business, Norkom has reached agreement with the Digital Harbor founder to transfer the government business into a separate entity in which Norkom will make a €2.15 million (US$3.15 million) investment.
• Norkom’s market franchise continues to rise with 19 new clients added during the period including Washington Mutual, Union Bank of California, Permanent TSB, Westpac, Bendigo Bank and St George.
• Norkom is evolving its partner channel strategy and has established new relationships with IBM, eFunds and Bearing Point in the period, to add to existing relationships with Capgemini and Accenture.
• Norkom has gained market recognition as an effective enterprise-wide financial crime management solution provider most recently by the analysts, Gartner.

Commenting on the interim results Norkom’s chief executive officer Paul Kerley said: “When we came to the public markets we articulated a strategy of delivering strong organic growth with profits while pursuing complementary acquisitive growth. We are pleased with the progress we have made against this strategy during this financial period. A strong financial performance has been achieved across all our regions at a time when the company has been involved in growing new markets, completing a complex acquisition and raising further funds on the public markets.

"In the past couple of years Norkom has invested heavily in building out its senior management capacity across all our markets in anticipation of the organic and acquisitive strategy that we would pursue. It is good to see those investments now paying off. Such success is tangible evidence of our strategy at work as we consolidate our position as a global market leader and gain recognition as a provider of innovative enterprise-wide financial crime and compliance solutions dedicated to the financial services sector.”

The global market for financial crime and compliance solutions continues to grow by an estimated 24% annually, rising from US$480 million in 2007 to US$917 million by 2010. This growth is fuelled by a number of factors including an increase in international anti-money laundering and counter-terrorist financing regulation, for example the introduction of the third EU Money Laundering Directive which enters into force on 15 December this year. In addition, more stringent worldwide enforcement of such regulations has resulted in over US$222 million being levied in fines to 20 institutions for failing to prevent money laundering in the last two years. On top of these penalties, the true impact to those organisations affected is many multiples greater again due to the costs associated with operational disruption, reputation damage and business recovery.

Norkom’s strategy focuses on providing clients with an end to end, enterprise financial crime and compliance solution which is underpinned by a common technology infrastructure enabling them to evolve their use of the solution in line with both market and business needs. Our approach safeguards clients’ technology investments, increases the effectiveness of their operations and protects them from escalating losses to fraud. The ability of Norkom’s solutions to impact financial losses while decreasing operational costs is proving attractive to a market where an estimated 84% of total spend is attributable to administration and personnel costs. Industry analysts forecast that technologies, such as Norkom’s, can address this issue reducing operational costs by 15% annually.

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